SEC, NASAA warn investors to be wary of financial planning titles

Bulletin echoes April report on licenses vs. designations

Sep 11, 2013 @ 3:26 pm

By

SEC, NASAA, designations, licenses, titles
+ Zoom

The alphabet soup confusion faced by investors has led the Securities and Exchange Commission and the North American Securities Administrators Association to issue a note about the plethora of designations used by financial advisers.

The SEC and NASAA make two key points in the joint bulletin issued today: that financial professional designations and licenses are not the same, and that investors should not rely solely on a title to determine whether a financial adviser has the expertise they need.

“We know there are a number of titles and designations out there, some legitimate and some not so,” said Bob Webster, NASAA's director of communications. “We wanted to send out this notice out just to give investors a quick resource to help them distinguish between the legitimate and illegitimate titles.”

In April, the Consumer Financial Protection Bureau submitted a report to the SEC and Congress that highlighted the dangers endemic in the proliferation of “senior designations.” The report noted that some unscrupulous operators have take advantage of elderly consumers by touting their qualifications and selling “inappropriate and sometimes fraudulent financial products and services.”

The SEC-NASAA bulletin also recommended that investors avoid relying on titles to determine whether an adviser has the requisite expertise to manage their money because many labels accredited by outside organizations are neither earned by merit nor provide a means of recourse in the event of problematic activity.

“While some private groups that grant titles may provide a method for you to complain about one of their members and can discipline a member for conduct, there are other groups that do not take complaints or discipline their members,” the report said.

The report concludes with a number of resources for investors to consult when judging the expertise of an adviser, including links to the Financial Industry Regulatory Authority Inc.'s descriptions of the education and experience requirements for certain titles and databases investors can use to confirm the legitimacy of designations used by advisers.

“We want to help investors know who they're dealing with exactly and what they've done to earn their titles,” Mr. Webster said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Stephanie Bogan: How financial advisers can achieve more by reframing their realities

By revaluating the choices they make and the outcomes that result from them, financial advisers can make sure they're properly serving those most important to them — their clients, according to Stephanie Bogan, founder of Educe Inc.

Latest news & opinion

Retirement planning for women

Longer lifespans and lower savings require creative income strategies.

Sean Spicer resigns as press secretary after Anthony Scaramucci is appointed communications director

Scaramucci is known as an ardent foe of the DOL fiduciary rule, having said during the campaign that Trump would repeal it .

Redoing the math on a 4% retirement withdrawal rate

Given the current interest-rate environment and other factors, advisers disagree about whether the number is too conservative or not conservative enough.

House panel passes bill to replace DOL fiduciary rule with one requiring disclosure of conflicts

Measure likely to continue in partisan advance in House, but could stall in Senate.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print